The European Central Bank on Thursday left its benchmark interest rate at the record low level of 0.25 percent amid some improvent in the outlook for the Eurozone economy.
"Based on our regular economic and monetary analyses, we decided to keep the key ECB interest rates unchanged. Incoming information confirms that the moderate recovery of the euro area economy is proceeding in line with our previous assessment," ECB chief Mario Draghi said.
The ECB's Governing Council left the interest rate on its marginal lending facility, the amount it charges for one-day loans, at 0.75 percent, while the interest rate on its deposit facility remains at 0 percent.
There was some uncertainty in the markets about whether the ECB would maintain its policy.
"Regarding the medium-term outlook for prices and growth, the information and analysis now available fully confirm our decision to maintain an accommodative monetary policy stance for as long as necessary. This will assist the gradual economic recovery in the euro area. We firmly reiterate our forward guidance. We continue to expect the key ECB interest rates to remain at present or lower levels for an extended period of time," Draghi said.
The ECB revised its 2014 inflation outlook downward by one-tenth of a percent to 1 percent.
The Eurozone inflation rate is expected to average 1.3 percent in 2015, the same level forecast last December, Draghi said.
"The latest ECB staff macroeconomic projections, now covering the period up to the end of 2016, support earlier expectations of a prolonged period of low inflation, to be followed by a gradual upward movement in HICP inflation rates towards levels closer to 2 percent," the central bank chief said.
The ECB expects the inflation rate to be 1.5 percent in 2015, Draghi said.
"In keeping with this picture, monetary and credit dynamics remain subdued. Inflation expectations for the euro area over the medium to long term continue to be firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2 percent," Draghi said.
The ECB expects the Eurozone economy to grow 1.5 percent in 2015 and 1.8 percent in 2016.
The central bank remains vigilant for potential problems that could hurt economic growth.
"Developments in global financial markets and in emerging market economies, as well as geopolitical risks, may have the potential to affect economic conditions negatively," Draghi said.
Economic growth could also be affected by "weaker than expected domestic demand and export growth, and insufficient implementation of structural reforms in euro area countries," the central bank chief said.
Central banks around the world have been pumping liquidity into their economies in an effort to ramp up growth in the wake of the worst economic downturn since the Great Depression.
The U.S. Federal Reserve has kept short-term interest rates near zero and implemented an aggressive monetary stimulus program pegged to unemployment and inflation targets. EFE